The story of how I earned 3,000,000 rubles in 3 months by selling scrap metal, but lost my beloved jeep

Where to start opening a scrap metal collection point

Depending on the region where you plan to do your metal collection business, you will need to find out if there is a larger or wholesale scrap metal facility nearby that offers better metal prices than yours.

If so, then in this case you should not expect a lot of income from your activity, since everyone who sells scrap metal will look for a collection point where they will offer him a higher price.

It is natural that in this case it is not profitable to engage in such activity, since it will turn out to be unprofitable and unprofitable.

It is much better to organize scrap metal collection points in nearby areas, neighboring towns and cities, taking into account the availability of normal transport connections to these places.

This is a good idea, because in essentially small settlements, where there are no serious competitors nearby, the situation allows you to set a price that is most profitable primarily for you.

The final income received will completely cover all the costs you have incurred, including transportation.

If there is no large iron collection point in your city or town, then it is quite possible that you have found a direction for your business that will be very profitable for you.

For profitable cooperation, there is another option when the company itself does not work with retail, individual clients, but purchases metal in large, wholesale quantities.

This is a very acceptable option, since you can easily buy metal from the population and be able to accumulate a large batch for its further sale to large companies.

Beware of competitors, because good ideas are not only coming to you.

Where can you sell scrap metal?

There are two main options:

• in the first case, the scrap is delivered to the end user. For example, a metallurgical plant, etc. To become a supplier to such a consumer, it is necessary to offer him financially attractive terms of cooperation or submit to the price offered by the plant. But at the same time, no one forces only local factories to be suppliers of scrap metal;

Metallurgical plants are the main consumers of scrap metal

• in the second case, you can get by with resale. Those. the scrap metal collection point collects it for the purpose of selling it to another scrap collector. This method of sales is convenient because it opens up a stable sales direction. But there is a serious drawback: the price! To ensure that this drawback does not interfere with work, a volume of sales and purchases will be required at which expenses and income will ultimately yield the required amount of profit. This format of work is not an intermediary activity - this is worth remembering. Therefore, you will still have to obtain a license to work with scrap metal.

Video: promotional video of one of the Moscow scrap metal collection points:

Choosing a location for a scrap metal business

Correctly determining the location of the point for receiving scrap metal directly affects the generation of income; it is necessary to take into account all the pros and cons, so that in the end, your business will benefit and benefit, primarily for you.

All possible options for choosing a place for your business to flourish are considered. After analyzing and considering all the options very carefully, choose the option that suits you best.

If, for example, you have your own private house, then at first it is quite possible to set up a scrap metal collection point in your yard. This option is very profitable and convenient, which makes it possible to work around the clock, and there is no rent.

At the same time, it is necessary to fulfill all the conditions so that as a result of your activities, your neighbors do not suffer and do not complain about you.

In the case of metal delivery around the clock, while carrying out loading work, your relations with your neighbors may very well deteriorate, which will lead to quarrels, showdowns, and even fines.

There is another option for choosing a location for the item, and it also has positive and negative sides. There is a proposal to open a point in a country house or in a garage, since they are located outside the residential city limits, there are no neighbors, and there will be no problems.

There is really one inconvenience, if you cannot be at your dacha around the clock, that is, you need to hire a watchman or security guard who, if necessary, could replace you at any time.

To do this, you need a person whom you can completely trust, who will not allow theft from others, and who himself will not steal what he protects.

During normal operation, a large amount of metal is usually collected in a warehouse, which makes it very difficult to calculate and notice the disappearance of several kilograms of it.

It should be noted that the garage or dacha does not have sufficient access for vehicles that are planned to transport scrap metal.

Sources of scrap metal and distribution routes

The end consumers of scrap are metallurgical enterprises; in Russia, approximately 35 large plants regularly purchase secondary raw materials. The beginning of the chain is scrap distributors, that is, organizations that accumulate it as a result of production activities, and the population. Traditional scrap collection sites:

• acceptance of metal products directly from individuals;
• dismantling of building structures and buildings;
• removal of defects and waste from industrial enterprises;
• searching for metal in unauthorized landfills;
• collection, transportation from landfills of solid waste.

Owners of metal waste and consumers are connected by suppliers. They are divided into two large groups: enterprises with a scrap collection site, and transit organizations that transport (sell) them to metallurgical plants. The composition of suppliers is very heterogeneous.

• Small illegal ones who buy it for cash and resell it to metal depots. They earn from 50 to 3 rubles per ton of ferrous metal, a little more on non-ferrous metal. Net income ranges from 700 thousand to 1.2 million per year.
• Independent medium-sized scrap metal collection points, equipped and licensed. They work successfully with good organization, an established distribution channel, logistics, and constant monitoring of market prices.
• Large network suppliers, independent (PC Vtormet, ImpexTrade) and affiliated with, SibMetHolding and others). Large consumers prefer to work with them.

Before opening a scrap metal collection point, it is advisable to conduct an analysis of competitors in your region. Sometimes it is more profitable to fit into an already existing network; this often makes it possible to work without a license that the parent company has. In addition, a constant distribution channel is guaranteed. Of course, profits will have to be shared, but the business will be more stable.

Recruitment of personnel for scrap metal acceptance

Let's imagine that one real worker has already been found - this is a security guard, who will be needed if the reception point is located far from the place where you live.

If you do not plan to collect and receive iron yourself, then you need to hire a receiver. Another reminder that you need to be very careful when choosing your staff.

Packer is another position for which a person will be needed in order to sort the received metal and distribute it into separate cells, depending on its composition.

If you have a correspondingly small supply of metal, then in this case one person can easily handle the reception and sorting. As a last resort, you yourself can take part in this process.

If you are not greedy and pay your employees salaries normally, then you will have a guarantee that they will not try to deceive you and steal. A large number of owners, considering the work performed by receivers and packers to be not difficult, pay them very little.

Professionals of this type of business advise paying for such work within 15,000 rubles for each individual. A good method of monitoring work is the presence of video cameras, which makes it possible to prevent problems that arise and quickly find those responsible for the theft.

Each time you arrive at a work site, take the time to check the serviceability and accuracy of the scales and, of course, monitor the process of receiving metal.

How it is recycled

In receivers, raw materials are initially sorted. Scrap is classified into 3 groups, depending on the type of metal: ferrous, non-ferrous, precious. Having previously divided it, it is divided into categories: household appliances, vehicles, parts.

The next step is packaging and sending to the processing plant. Workers check that the sorting is correct and large items are cut into small pieces.

The final stage is remelting in a furnace and forming into bars. They are stored and sent to consumers for subsequent processing. Salary amount

To calculate it for scrap metal, the sales efficiency indicator is taken into account. It is 20%. With a revenue amount of 100 thousand rubles, the income will be 20,000. Each enterprise has its own level of profitability.

Scrap metal acceptors earn extra money by tampering with scales—by incorrectly weighing raw materials. This action is risky.

What equipment is needed to work with scrap metal?

The advantage of this business is that at the initial stage it does not require large investments. To complete a full and high-quality metal intake, you only need a pair of scales.

Some will weigh large batches of metal, more than a ton, perhaps even with a car, while others will weigh smaller batches, not exceeding one ton in weight.

You also need to purchase a magnet; it will help determine the type of metal you are accepting, and, of course, a set of special tools for disassembling the metal. In this composition, for a person starting a scrap metal collection business, a standard set of tools looks like.

To transport scrap metal, you will need a car, and if you do not have your own, you can rent one (we recommend reading the article about the car rental business). If you successfully start a business and receive your first income, it will be possible to purchase a loader or press machine.

Pros and cons of a business idea

Advantages:

• Opening of new collection points throughout the city and in neighboring regions
• Possibility to avoid intermediaries when delivering scrap
• Export prospects

Flaws:

• Risks of collapse in scrap prices
• Supplier fraud, such as pouring concrete into metal pipes
• Fraud of wholesale warehouses, for example, twisted scales that show less scrap weight

The scrap collection business does not depend on the season, which makes it doubly attractive for inexperienced entrepreneurs. However, its launch and development are associated with a number of difficulties, which can only be overcome with a well-functioning scrap collection system. We wish you good luck!

What documents are needed to open

It is necessary to register the subject of economic activity. Usually an individual entrepreneur is chosen. The prepared documentation (passport of a citizen of the Russian Federation, tax code, applications for registration and choice of taxation system) is submitted to local government authorities or to specially created multifunctional public service centers (MFC). After this, the obligation arises to register with the Pension Fund and Social Insurance Fund. Opening a bank account is necessary for settlements and payments with companies.

How to make money selling scrap metal in Moscow?

Scrap metal can be considered any metal objects that are no longer used for their intended purpose. This could be household appliances that cannot be repaired, or water pipes.

It is not difficult to find a collection point and hand over scrap metal in Moscow. Specialized collection points offer good prices for 1 kg of raw materials: from 50 to 270 rubles per 1 kg of non-ferrous metal and from 9,500 to 1,200 rubles per ton of ferrous metal.

By handing over metal, you will not only be able to get good money. You will help the environment. Abandoned items begin to decompose over time. Harmful chemical elements seep into the soil and water.

Important

Over time, they enter the human body. Heavy compounds such as lead pose a particularly great threat. When heated, it releases toxic fumes into the air.

Even a small dose of metal can lead to irreversible processes in the body.

Types of scrap metal

So, there are 2 types of scrap:

The first group includes iron. It is very common in industry and everyday life, which explains the low cost of 1 kg. At the collection points for waste raw materials they also take:

• industrial steel;
• cast iron;
• galvanized products;
• various alloys.

Non-ferrous metal is not so common, so it is accepted in kilograms and you can earn more from such scrap metal. Particularly high prices are offered for copper, bronze and brass. Lead, zinc, and aluminum work well.

A separate group of scrap that is actively purchased is made up of conductive cables. They are made from pure alloys of aluminum and copper, which is why they are especially popular. They are taken by the kilogram. The highest price is given for a copper power cable.

Where can I get unnecessary metal?

How to make money selling scrap metal? First you need to know where to look for it. Often the population willingly sells scrap to buyers. You can organize a mobile collection point, that is, drive a suitable car around small towns and villages and buy leftovers from people at a lower price and make money on the difference. However, gasoline costs need to be taken into account here.

You can go the other way and look for scrap metal yourself. It is found in large quantities in the following places:

• In old factories. After the liquidation of factories, abandoned scrap from machine tools and dismantled metal structures remains on their territory.
• On construction sites. At construction sites you can also find scraps that are no longer suitable for further use (pieces of reinforcement, supports).
• In landfills. Often people simply throw away unnecessary things without bothering to recycle them. A lot of interesting things are found in car dumps.
• On the railways. The tracks are regularly reconstructed, new lines are laid and old ones are abandoned. In such places you can find high-quality raw materials that will be accepted at a high price.
• On the fields. It is difficult to search for metal in such places, because they quickly become overgrown, but they also contain an abundance of waste, for example, broken parts of working equipment that were simply thrown into the bushes.

By searching for metal on your own, you will be able to earn more than by buying it from the public, because all the profit will go to you, but it is difficult to reach large volumes on your own.

Earning scheme

Anyone can make a profit from selling raw materials. Of course, you need to make some effort to find it, because other metal hunters have long ago handed over everything that was “at hand”, in plain sight. You can use a metal detector if possible. It will simplify the task and help you get the tidbits right out of the ground.

So, how to make money quickly and a lot from scrap metal? There is a proven scheme that allows you to make a guaranteed profit. First, you need to find a collection point for secondary raw materials, in other words, a metal warehouse, and clarify the prices for the material and the terms of cooperation. If you have a car at your disposal, then the distance to the collection point will not matter.

The cost of the material varies depending on its condition and quality. The stronger it is and the less susceptible it is to decay under the influence of the external environment, the more money you will be able to earn.

If you decide to start a business seriously, you should also take into account its seasonality. Prices for raw materials are subject to year-round fluctuations.

The most interesting months for businessmen are November-December and March-April.

To start your own business, you need to get a car. A regular Gazelle will do. You will need scales and a cutter, with which you can buy scrap metal from the population. Buyers usually give more for whole pieces. If the product has to be cut, then you can bargain with its owners and reduce the cost.

This kind of income is a good idea for seasonal and permanent business. As a rule, those who engage in it do not register anywhere. The only thing you should pay attention to is the origin of the raw materials. It is worth making sure that it is not stolen, but has actually served its time and is ready for recycling.

Technology of making money at a scrap metal collection point

A collection point is opened in rented garages or hangars. It must have an area of ​​50 sq.m. and higher. It is also necessary to organize transport for the transportation of harvested scrap metal. It is advisable if the point is equipped with a special metal press and scissors. The staff must have a specialist sorter who will classify scrap into ferrous and non-ferrous.

Advertising is a necessary step in the early stages of doing business. It is advisable to post advertisements around the area, order an advertising banner and a sign. It is necessary to hand over metal raw materials to large enterprises and metallurgical plants. Regular scrap suppliers can be incentivized with small price premiums. It is also worth considering the possibility of self-pickup or rental of a vehicle for the purchase of multi-kilogram quantities of raw materials for repair work or construction.

Do you want to earn good money? Just invest your money in cars. To know which cars are better suited for business and how much you can actually earn from it, look at profitable investments in cars and try to increase your income.

Or you can resort to investing in apartment buildings. Learn about the secrets of creating cash flow on apartment buildings from scratch and learn to earn money. There is always a risk, but if you invest wisely, it will be minimal.

Official registration of business

Working without a license is fraught with problems with the law and fines.

The state strictly regulates the delivery and acceptance of scrap metals. To open a business, you will need to obtain a license and register as an individual entrepreneur or LLC.

What is needed for self-legalization

It is impossible to start the operation of the reception point immediately after purchasing equipment and registering an individual entrepreneur. As of 2020, to open a metal receiving business you need:

1. Equipment for chemical analysis of non-ferrous metals;
2. A press for baling scrap, as well as a device for grinding ferrous metal;
3. Certificates confirming the qualifications of personnel (for example, a 1st category scrap metal compactor will be required).

Individual entrepreneur or LLC

Both schemes have advantages and disadvantages, so it is impossible to give a definite answer.

• Increased fines are imposed on organizations (LLCs) . For example, for conducting activities without a license, an LLC is fined 50 thousand rubles, and an individual entrepreneur - 5 thousand.
• The individual entrepreneur bears personal financial responsibility for his activities. The LLC is liable only within the scope of the company’s property; the personal property of its founders does not concern the bailiffs.
• A legal entity (LLC) does not pay income tax if the activity is unprofitable . An individual entrepreneur transfers money to the appropriate organizations, even if there is no activity.
• The entrepreneur must register as an employee insurer and bear the corresponding burden and responsibility. The organization is automatically registered as an insurer upon receiving the status of a legal entity.

What documents are required?

It is impossible for either an individual entrepreneur or an LLC to make money legally by selling scrap metal, bypassing formalities. The set of documents and conditions is different for both commercial entities.

For individual entrepreneurs:

• application in form No. P21001 (approved by order of the Federal Tax Service of Russia No. MMB-7-6/25, 01/25/2012);
• certification of the signature of an individual on this application by a notary;
• state duty in the amount of 800 rubles (according to tax article 333.33).

For LLC:

• charter - 2 copies;
• protocol (if there are several founders) or decision on the formation of a company (one founder);
• application in form No. P11001 (approved on January 25, 2012 by the Federal Tax Service of the Russian Federation in order No. MMV-7-6/ [email protected] );
• state duty in the amount of 4,000 rubles;
• fee for notarization of the signatures of the founders on the LLC registration application;
• authorized capital in the amount of at least 10,000 rubles, contributed in the form of money or property equivalent in value.

Registration of a license

The activities of scrap metal collection points are regulated by Decree of the Government of the Russian Federation dated December 12, 2012 No. 1287 “On licensing activities for the procurement, storage, processing and sale of scrap ferrous and non-ferrous metals.” A license is not required only for those who sell their own scrap metal. Separate licenses are required for the resale of ferrous and non-ferrous metals.

Reviewing an application for a license and making a decision takes up to 45 working days. The state duty is 7,500 rubles. It is better to obtain a license in consultation with lawyers.

Which tax system to choose

The easiest way is to choose a simplified special tax regime (STS). Individual entrepreneurs operating under the simplified tax system are exempt from accounting (subject to maintaining a Book of Income and Expenses). In other cases, there is accounting, but it is carried out according to a simplified scheme. The simplified tax system implies payment of advance contributions every quarter. The payment report is submitted once a year. Within a month from the moment of registering a business under the simplified tax system, you need to write an application to the Federal Tax Service in form No. 26.2-1. If this is not done, the company will by default be transferred to the general taxation regime.

OKVED codes

The All-Russian Classifier of Types of Economic Activities (OKVED) is a system of codes that must be indicated when registering any business. The following codes are suitable for a scrap metal collection point:

• 38.11 Collection of non-hazardous waste;
• 38.32.3 Treatment of waste and ferrous metal scrap;
• 38.32.4 Treatment of non-ferrous metal waste and scrap;
• 38.32.11 Sorting of metal materials for further use;
• 46.77 Wholesale of scrap and waste;
• 49.41 Activities of freight transport;
• 52.10 Warehousing activities.

Organization of settlements with clients

Individuals selling scrap to a collection point are usually paid in cash. It is required to prepare an acceptance certificate and cash orders for each fact of disbursement of funds. In order to save on bank tariffs, it is worth abolishing the cash limit, but this is only allowed for individual entrepreneurs and small businesses. In this case, you can store any amount at the cash desk of the collection point.

To work with corporate clients you need a current account. It can be opened in parallel with the registration of an individual entrepreneur or LLC, or you can open a bank account later.

Franchise work

Reselling scrap as a franchise is unprofitable for a number of reasons. You will have to pay the franchise owner regularly. You bear all risks yourself, and cover expenses or losses from your savings. Business conditions in the region do not always meet the requirements of the franchise owner.

One of the advantages is a targeted loan for a scrap collection business, which the bank can provide to an individual entrepreneur or organization operating under a franchise. The franchise owner will also help you find scrap metal buyers and provide equipment for your site.

Popular franchises include:

• "Timemet Vtorchermet";
• "Vtorresurs site";
• "proLOM".